Portugal's Inflation Stability Outshines UK, US, and Eurozone

Portugal continues to reinforce its reputation for economic stability, with its latest inflation figures surpassing those of the UK, the US, and the wider Eurozone.

In January 2025, Portugal’s consumer price inflation fell to 2.5% from 3.0% in December 2024, demonstrating a consistent downward trend and bolstering confidence in the country’s economic policies.

Conversely, the Eurozone’s inflation rate edged upward, increasing to 2.5% in January 2025 from 2.4% in December 2024, despite persistent efforts from the European Central Bank (ECB) to contain price rises.

The ECB has implemented four consecutive interest rate cuts since June 2024, reducing rates from 4% to 2.75% by January 2025. However, despite these measures, inflation in the Eurozone continues to climb, whereas Portugal has managed to buck this trend.

Across the Atlantic, inflation in the US rose unexpectedly to 3% in January 2025, up from 2.9% in December 2024, significantly overshooting the Federal Reserve’s 2% target. Similarly, in the UK, inflation surged from 2.5% in December 2024 to 3% in January 2025, marking its highest level in ten months.

The sharp rise in these major economies and the broader EU has surprised economists, as essential costs such as food, non-alcoholic beverages, and transport remain persistently high.

In contrast, Portugal’s inflation reduction has been driven by notable decreases in key sectors. The cost of food and non-alcoholic beverages dropped significantly (1.4% vs. 3.4% in December 2024), along with housing and utilities (3.5% vs. 7.1%), according to Trading Economics. Even transport costs saw a slight decline (2.4% vs. 2.5%), further easing financial pressures on Portuguese households.

Although some categories experienced minor increases—such as recreation and culture (4.0% vs. 2.5%) and restaurants and hotels (5.6% vs. 5.2%)—the overall inflation trajectory remains firmly under control.

Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club, remarked:

“With a strong grip on inflation, Portugal stands out across Europe for its economic resilience and investor confidence, which is at an all-time high compared with some major countries such as the UK, the US, and the wider Eurozone.

“We’ve found that our community is drawn to Portugal for its stability, cost of living, lifestyle and culture, and the welcoming approach to people relocating or investing in the country. The Golden Visa residency-by-investment programme and the new Tax Incentive for Scientific Research and Innovation (IFICI) tax regime, or NHR 2.0 tax regime as it’s often known, continue to attract investors, entrepreneurs, and their families.”

While other economies struggle with persistent price pressures, Portugal’s success in stabilising inflation highlights the country’s sound fiscal policies and strong economic management. As global markets continue to grapple with inflationary challenges, Portugal stands as a prime example of how strategic economic governance can deliver tangible benefits to its citizens.

Portugal’s inflation decrease is further supported by the recent upgrade of the country’s economic rating from ‘A’ to ‘A+’ in the latest international economic assessment, reinforcing its reputation for financial stability.

Investor confidence in Portugal is also at an all-time high, with 84% of entrepreneurs surveyed by Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK. The EY report also revealed that 77% of global executives anticipate an improvement in Portugal’s investment attractiveness over the next three years, surpassing expectations for the wider Eurozone (67%) and the UK (59%).

Paul Sheedy, international advisor to the Portugal Future Fund, an alternative investment fund approved for Golden Visa residency-by-investment in Portugal, stated:

“We’ve seen an uptick in investors turning their interests to Portugal. The Golden Visa residency-by-investment programme continues to attract HNWIs looking to relocate to Portugal while also potentially benefitting from a €500,000 investment in one or more of the regulated and approved alternative investment funds for Golden Visa.

“Portugal offers not only stability but a high quality of life, low cost of living, and the opportunity to benefit from and contribute to the country’s economic growth.”

Portugal’s government projects GDP growth of 1.8% in 2024 and 2.1% in 2025, according to Finance Minister Joaquim Miranda Sarmiento.

Meanwhile, Portugal’s property market continues to thrive, particularly in the luxury sector. Recent data forecasts a strong +5.8% growth for 2025, outperforming the broader EU and UK property markets, which are expected to decline by -2.5% over the same period.

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About Portugal Pathways

Portugal Pathways has assisted hundreds of investors in securing Golden Visa residency-by-investment. Through its expert network, the company provides guidance on luxury property, wealth management, tax optimisation—including post-NHR planning—private healthcare, IFICI tax incentives, money transfers, and bespoke relocation solutions.

About Portugal Future Fund

The Portugal Future Fund strategically invests in high-growth sectors to drive economic innovation. Approved for Portugal’s Golden Visa residency-by-investment, it provides investors with an exclusive opportunity to participate in Portugal’s ongoing development.

About Portugal Investment Owners Club

The Portugal Investment Owners Club (P Club) is an exclusive membership community for discerning investors, families, and organisations seeking to capitalise on Portugal’s economic opportunities while enjoying unparalleled lifestyle experiences and exclusive events.

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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice.

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